SA giant fund Growthpoint targets local property market

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The fund will invest 80 per cent of the proceeds in income properties and the remaining 20 per cent will go towards development properties.
Growthpoint has invested $50 million (Sh5.1 billion) in the fund while the International Finance Corporation (IFC), which is investing Sh1.5 billion in Stanlib Reit, has committed $40 million (Sh4.1 billion). Investec Asset Management is also a partner in the Pan African fund.
Growthpoint’s fund will invest in shopping malls, offices, hotels and industrial properties such as warehouses. Other funds that are set to enter the Kenyan market are also targeting the same kind of properties.

Growthpoint Properties, the largest listed Real Estate Investment Trust (Reit) in South Africa, has become the latest fund to announce intention to enter the Kenya market.

It has launched a Pan-African fund targeting raising $500 million (Sh511 billion) to invest in East, West and Southern African property markets excluding South Africa.

“The new pan-African real estate vehicle will initially target investment in select African economies in East, West and Southern Africa. These include Namibia, Botswana, Mozambique, Zambia, Uganda, Tanzania, Kenya, Nigeria, Ghana and Morocco, among others, with opportunity-driven investment that will give Growthpoint’s shareholders as well as investors in the vehicle access to real estate in other African countries too,” the firm said in a statement.

The fund will invest 80 per cent of the proceeds in income properties and the remaining 20 per cent will go towards development properties.

Growthpoint has invested $50 million (Sh5.1 billion) in the fund while the International Finance Corporation (IFC), which is investing Sh1.5 billion in Stanlib Reit, has committed $40 million (Sh4.1 billion). Investec Asset Management is also a partner in the Pan African fund.

“We believe the African real-estate markets are well positioned for a long-term growth phase given the significant supply deficit across the continent.

‘‘We are excited about this unique partnership as it brings together our pan-African investment experience with Growthpoint’s industry-leading property investment expertise and the IFC’s deep knowledge of the continent,” said Investec Asset Management global client head John Green.

Growthpoint’s fund will invest in shopping malls, offices, hotels and industrial properties such as warehouses. Other funds that are set to enter the Kenyan market are also targeting the same kind of properties.

Private equity firm Xterra Capital Advisors said it will use 34 per cent of proceeds from its Pan-African fund to invest in similar properties. Xterra’s fund intends to raise Sh61 billion in the form of both debt and equity.

Stanlib Investments Reit, currently on sale, will invest in rental income properties and has identified Greenspan Mall as one of the properties to be purchased. The IFC has also committed to invest Sh1.5 billion in Stanlib’s debut Reit to be listed on the Nairobi Securities Exchange (NSE).

Finnish private equity firm Taaleritehdas will invest up to Sh3 billion in Kenya’s property market with its Sh6.4 billion Africa-focused fund.

Delta Property Fund, a Reit listed on the Johannesburg Stock Exchange, is also scouting for local investment deals.